Excessive secretion of glucagon is a major contributor to the development of diabetic hyperglycemia. Secretion of glucagon is regulated by various nutrients, with glucose being a primary determinant of the rate of alpha cell glucagon secretion. The intra-islet action of insulin is essential to exert the effect of glucose on the alpha cells since, in the absence of insulin, glucose is not able to suppress glucagon release in vivo. However, the precise mechanism by which insulin suppresses glucagon secretion from alpha cells is unknown. In this study, we show that insulin induces activation of GABAA receptors in the alpha cells by receptor translocation via an Akt kinase-dependent pathway. This leads to membrane hyperpolarization in the alpha cells and, ultimately, suppression of glucagon secretion. We propose that defects in this pathway(s) contribute to diabetic hyperglycemia.